Teradyne(TER) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Overview This section provides an overview of Teradyne's Q2 2025 financial results, CEO commentary, and Q3 2025 guidance Q2 2025 Financial Highlights Teradyne reported Q2 2025 revenue of $652 million, with GAAP EPS of $0.49 and Non-GAAP EPS of $0.57. Revenue was primarily driven by Semiconductor Test, Robotics, and Product Test segments | Metric | Q2'25 | Q2'24 | Q1'25 | | :--- | :--- | :--- | :--- | | Revenue (million) | $652 | $730 | $686 | | GAAP EPS | $0.49 | $1.14 | $0.61 | | Non-GAAP EPS | $0.57 | $0.86 | $0.75 | - Q2 2025 revenue breakdown: $492 million in Semiconductor Test, $75 million in Robotics, and $85 million in Product Test[1] CEO Commentary and Business Outlook The CEO highlighted better-than-expected Q2 results, particularly in Semiconductor Test driven by AI applications. Improved visibility and strengthening demand in compute, networking, and memory are expected to lead to strong second-half performance, primarily driven by AI - The Semiconductor Test Group drove better than expected results in Q2 2025, with System-on-a-Chip (SOC) for artificial intelligence applications being the strongest growth driver[2] - Visibility into the remainder of the year has improved, and demand in compute, networking, and memory is strengthening[2] - AI is expected to drive strong second-half performance for Teradyne[2] Third Quarter 2025 Guidance Teradyne provided guidance for Q3 2025, projecting revenue between $710 million and $770 million, with GAAP EPS ranging from $0.62 to $0.80 and Non-GAAP EPS from $0.69 to $0.87 | Metric | Q3'25 Guidance (Low) | Q3'25 Guidance (High) | | :--- | :--- | :--- | | Revenue (million) | $710 | $770 | | GAAP Net Income per Diluted Share | $0.62 | $0.80 | | Non-GAAP Net Income per Diluted Share | $0.69 | $0.87 | Company Information & Disclosures This section details Teradyne's business, its use of non-GAAP financial measures, and a safe harbor statement regarding forward-looking information About Teradyne Teradyne designs, develops, and manufactures automated test equipment for semiconductors and electronics, and advanced robotics systems including collaborative and mobile robots for manufacturing and warehouse operations - Teradyne's core business involves designing, developing, and manufacturing automated test equipment for semiconductors and electronics products[6] - The company's advanced robotics business includes collaborative robots and mobile robots supporting manufacturing and warehouse operations[6] Non-GAAP Financial Measures Teradyne uses non-GAAP results to complement GAAP, excluding items like acquired intangible asset amortization, restructuring, ERP expenses, and pension adjustments. These measures aim to provide supplemental information on baseline performance, aid operational decisions, and facilitate comparisons - Non-GAAP results exclude certain income items and charges such as acquired intangible assets amortization, restructuring and other, ERP related expenses, inventory step-up, pension mark-to-market adjustment, and discrete income tax adjustments[5] - Non-GAAP performance measures are presented to provide meaningful supplemental information regarding Teradyne's baseline performance before gains, losses, or other charges that may not be indicative of its current core business or future outlook[5] - These non-GAAP measures are used for operational decisions, employee compensation, forecasting, and comparison with business plans, historical results, and competitors[5] Safe Harbor Statement This section cautions investors that the release contains forward-looking statements subject to risks and uncertainties, including macroeconomic factors, product demand, new product development, robotics business growth, R&D spending, supply chain issues, and geopolitical impacts. Actual results may differ materially - The release contains forward-looking statements regarding future business prospects, financial performance, and results of operations, identifiable by words like "anticipate," "expect," "plan," "believe," or "estimate"[7] - Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially, including macroeconomic factors, decreased or delayed product demand, and slowdowns in new product development[7] - Additional risk factors include the ability to grow the Robotics business, impact of R&D spending, supply shortages, and geopolitical factors such as tariffs, export controls, and international conflicts[7][8] Condensed Consolidated Financial Statements (GAAP) This section presents Teradyne's GAAP financial statements, including statements of operations, balance sheets, and cash flows for specified periods Statements of Operations The condensed consolidated statements of operations provide detailed GAAP financial performance for Q2 2025, Q1 2025, Q2 2024, and the six months ended June 29, 2025, and June 30, 2024. Key figures include net revenues, gross profit, operating expenses, income from operations, and net income | Metric (in thousands of USD) | Q2 2025 | Q1 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net revenues | $651,797 | $685,680 | $729,879 | $1,337,477 | $1,329,698 | | Gross profit | $373,012 | $415,336 | $425,844 | $788,349 | $765,126 | | Income from operations | $90,743 | $120,803 | $210,368 | $211,547 | $288,138 | | Net income | $78,372 | $98,896 | $186,273 | $177,269 | $250,470 | | Diluted EPS | $0.49 | $0.61 | $1.14 | $1.10 | $1.54 | | Cash dividend declared per common share | $0.12 | $0.12 | $0.12 | $0.24 | $0.24 | - Restructuring and other expenses for Q2 2025 were $2.372 million, significantly lower than Q1 2025 ($14.515 million), with employee severance primarily related to Robotics restructuring impacting approximately 150 employees in Q1 2025[10][12] - Teradyne sold its Device Interface Solution (DIS) business in Q2 2024 for $85.0 million, resulting in a gain on sale of business of $(57.486) million in Q2 2024[10][12] Balance Sheets The condensed consolidated balance sheets present the company's financial position as of June 29, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' equity | Metric (in thousands of USD) | June 29, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $339,252 | $553,354 | | Total current assets | $1,583,607 | $1,816,397 | | Total assets | $3,761,862 | $3,708,714 | | Total current liabilities | $675,265 | $624,579 | | Total liabilities | $924,561 | $889,420 | | Shareholders' equity | $2,837,301 | $2,819,294 | - Cash and cash equivalents decreased from $553.354 million at December 31, 2024, to $339.252 million at June 29, 2025[14] - Goodwill increased from $395.367 million at December 31, 2024, to $520.470 million at June 29, 2025[14] Statements of Cash Flows The condensed consolidated statements of cash flows outline the cash generated and used by operating, investing, and financing activities for Q2 2025 and Q2 2024, as well as the six months ended June 29, 2025, and June 30, 2024 | Metric (in thousands of USD) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $182,088 | $216,069 | $343,726 | $223,348 | | Net cash used for investing activities | $(178,462) | $(481,067) | $(240,237) | $(505,087) | | Net cash used for financing activities | $(136,804) | $(22,606) | $(313,619) | $(59,274) | | Decrease in cash and cash equivalents | $(136,380) | $(285,499) | $(214,102) | $(335,667) | | Cash and cash equivalents at end of period | $339,252 | $421,904 | $339,252 | $421,904 | - Net cash provided by operating activities for the six months ended June 29, 2025, increased to $343.726 million from $223.348 million in the prior year period[15] - Net cash used for investing activities for Q2 2025 was $(178.462) million, a significant reduction from $(481.067) million in Q2 2024, primarily due to lower investments in businesses and proceeds from the sale of a business in the prior year[15] GAAP to Non-GAAP Reconciliations This section provides detailed reconciliations between GAAP and non-GAAP financial measures for quarterly and six-month periods, including future guidance Quarterly Earnings Reconciliation This section provides a detailed reconciliation of GAAP to non-GAAP financial measures for the quarters ended June 29, 2025, March 30, 2025, and June 30, 2024, covering gross profit, income from operations, and net income per common share | Metric (in millions of USD) | Q2 2025 GAAP | Q2 2025 Non-GAAP | Q1 2025 GAAP | Q1 2025 Non-GAAP | Q2 2024 GAAP | Q2 2024 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net revenues | $651.8 | $651.8 | $685.7 | $685.7 | $729.9 | $729.9 | | Gross profit | $373.0 | $373.3 | $415.3 | $415.5 | $425.8 | $425.8 | | Income from operations | $90.7 | $98.2 | $120.8 | $140.8 | $210.4 | $159.6 | | Net income | $78.4 | $91.6 | $98.9 | $121.5 | $186.3 | $140.0 | | Diluted EPS | $0.49 | $0.57 | $0.61 | $0.75 | $1.14 | $0.86 | - Non-GAAP adjustments for Q2 2025 included $3.7 million for acquired intangible assets amortization, $2.4 million for restructuring and other, $1.1 million for ERP related expenses, and $7.4 million for amortization of equity method investment[16] - The Q2 2024 non-GAAP income from operations and net income were significantly impacted by the exclusion of a $(57.5) million gain on the sale of business[16] Six Months Ended Earnings Reconciliation This section reconciles GAAP to non-GAAP financial measures for the six months ended June 29, 2025, and June 30, 2024, detailing adjustments for gross profit, income from operations, and net income per common share | Metric (in millions of USD) | 6 Months 2025 GAAP | 6 Months 2025 Non-GAAP | 6 Months 2024 GAAP | 6 Months 2024 Non-GAAP | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $1,337.5 | $1,337.5 | $1,329.7 | $1,329.7 | | Gross profit | $788.3 | $788.9 | $765.1 | $765.1 | | Income from operations | $211.5 | $239.1 | $288.1 | $248.1 | | Net income | $177.3 | $213.2 | $250.5 | $222.6 | | Diluted EPS | $1.10 | $1.32 | $1.54 | $1.37 | - For the six months ended June 29, 2025, non-GAAP adjustments included $16.9 million for restructuring and other, $14.8 million for amortization of equity method investment, and $8.3 million for acquired intangible assets amortization[21] - The six months ended June 30, 2024, non-GAAP results excluded a $(57.5) million gain on the sale of business and included a $9.8 million loss on foreign exchange contract[21] Third Quarter 2025 Guidance Reconciliation This reconciliation provides the adjustments from GAAP to non-GAAP net income per diluted share for the third quarter 2025 guidance, primarily excluding acquired intangible assets amortization, equity method investment amortization, and non-GAAP tax adjustments | Metric | Q3 2025 Guidance (Low) | Q3 2025 Guidance (High) | | :--- | :--- | :--- | | GAAP net income per diluted share | $0.62 | $0.80 | | Exclude acquired intangible assets amortization | $0.03 | $0.03 | | Exclude equity method investment amortization | $0.05 | $0.05 | | Non-GAAP tax adjustments | $(0.01) | $(0.01) | | Non-GAAP net income per diluted share | $0.69 | $0.87 | Investor Information This section provides details for investors, including webcast access for Q2 results and contact information for inquiries Webcast Details A conference call to discuss Q2 results and business outlook was scheduled for July 30, 2025, with webcast access and presentation materials available on Teradyne's investor relations website - A conference call to discuss Q2 results and management's business outlook was scheduled for 8:30 a.m. ET, July 30, 2025[3] - Interested investors can access the webcast and presentation materials at **www.teradyne.com/investors**[3](index=3&type=chunk) Contact Information Contact information for investor inquiries is provided, listing Traci Tsuchiguchi, Vice President of Corporate Relations, and the company's website - For investor inquiries, contact Traci Tsuchiguchi, Vice President of Corporate Relations, at 978-370-2444[25] - Additional investor information is available on Teradyne's homepage at **http://www.teradyne.com**[24](index=24&type=chunk)